In early records, the town was called "Springhill Mines." Coal mining lead to the establishment and growth of the town, and until the 1960s, it was the town's only significant economic activity. Springhill was incorporated in 1889, and had an 1896 population of 4,901. The town is famous for both the Springhill Mining Disaster and being the childhood home of international recording star Anne Murray.

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The town is located on the northwestern edge of the Cobequid Hills mid-way between the Minas Basin and the Northumberland Strait. Its elevation varies from 140 to 185 metres above sea level.[citation needed] Located in the carboniferous area on the southern side of the Cumberland Coal Basin, Springhill's six main coal seams overlap. The seams, separated by strata of sandstone and shale from 11–110 metres in thickness, were once horizontal, but, because they were raised by internal earth movement, now slope sharply down into the earth. The seams dip to the northwest at an angle of thirty-five degrees.

Coal was so prevalent in the town that "there was a time when men got coal out of their backyards; shallow pits were found everywhere. In recent years, there have been instances when a homeowner would step out of his door only to find a big gaping hole where his driveway had been. Another part of an old mine had caved in."[7]

Springhill was the site of three devastating mining disasters during the era of industrial mining from the 1870s until the early 1960s. The first two disasters in 1891 and 1956 were caused by explosions and fires in the mines. The third and final disaster in 1958 accelerated the closure of the mines and was what was known as a "bump", or underground upheaval. Small-scale coal mining operations lasted in the town until the 1970s but the town took a significant hit as it was forced to adjust to a post-industrial service-oriented economy since the closure of the large mines in the late 1950s and early 1960s.

The abrupt end of large-scale industrial coal mining presented incredible economic challenges to the town as the region struggled with massive unemployment in the 1960s.

An unexpected legacy and benefit from the abandoned coal mines is being realized in the form of geothermal energy. Since their closure, the mines have filled with ground water which is heated to an average temperature of 18° C (65°F) by the surrounding earth. Beginning in the late 1980s, this heat source has been exploited by companies located in Springhill's industrial park, situated on the land where the surface facilities of the coal mines were located, reducing winter heating bills substantially.[8]

The provincial and federal government offered assistance and a federal medium-security penitentiary, the Springhill Institution was built during the late 1960s in an effort to diversify the town's economy.

Chalice, a charity affiliated with the Roman Catholic Church, is headquartered in the town. With over 46,000 children sponsored it is the largest Catholic child sponsorship program in Canada.[11]

On March 4, 2014, the town's elected council, under the leadership of Mayor Max Snow, announced the decision to give up the municipal incorporation charter for the Town of Springhill as of April 1, 2015. The council stated that the decision was arrived at because the municipality, incorporated in 1889, was facing unprecedented future financial pressures in the form of rising costs for services, salaries and pension obligations. At the same time, the municipality was facing a future of decreased revenue due to declining property tax assessments while at the same time having the highest municipal property tax rate in Nova Scotia. Upon dissolution, Springhill will become part of the Municipality of the County of Cumberland, comprising approximately 1/5 of the population of that municipality.[6] The decision was criticized by some residents alleging lack of consultation. [7]. However, the decision was also supported by other residents as a good choice. [8]